don't do it -- unbelievably easy to justify using it in an "emergency" rather than finding cash with more creative means (such as friends or family.) money goes on the card a hell of a lot quicker than it comes off.
don't believe any of that bullshit about "building credit" either.
of course you might be more disciplined than i am.....
but I had credit cards 10 years ago and it was just trouble. haven't used them in ten years and life is much more simple and better.
amazon has some sweet shit for sale though. :-)

I will not be carrying a balance / will be paying off in full every statement.
I have no history of and no current debt.
Purely just to have a record on the books I can pay back money I borrow.

I also see a lot of people recommending the Citi Double Cash for general use (I don't travel a lot, and when I do it's normally paid for by the job).

Sorry for any vagueness. Half asking about specific cards, half asking about general adult-ness-ing

Cash always and forever. Convenience is for suckers. You and I, Valis, we aren't suckers.

That's what I thought, but then people yell at me I'll never get to buy a car or house =( I can't exactly buy those outright even if I can pay all my monthly bills.

Do you plan on traveling? Then avoid the Citi double cash back card. Get one with 0 foreign transaction fees.

Traveling is one of the few times when I really wish I paid attention to what credit card I had.

Sorry just noticed you answered the question about travel.

Get one CC and use if for a specific purpose. I started building my credit by using my first CC just to buy gas. All other times leave it at home.

Building credit is a good idea, and you don't have to spend a ton of money to do it, especially if you pay the whole thing off each month.

Most banks will do travel money cards which are cheaper than your main CC for travel.

My response is "of course you should get a card- even if just a debit card" but then I don't live in the US. We don't really carry much cash here.

oh, I got a debit card. Didn't even think to mention it.

That won't build credit though.

Just look to get something with a $300ish line of credit. That would allow you to pay for a month's worth of gas (or whetevs) but wouldn't allow you to spend yourself in to a hole.

Just beware, once you start raising your credit, you'll get inundated with offers.

Thanks everyone!

Once you get one, be sure to share the number with zultar.

So why should you get a creditcard again? I assume you can pay with cashcards in America as well? Use an ATM if needed?

When buying a house and stuff like that, I'd say you're much better off applying for a loan/mortgage than using your creditcard anyway..

Loans are significantly cheaper than creditcard debts, aren't they?

Why do you want a creditcard?

Credit cards are useful for traveling because most places want them for reservations even if you pay in cash. It reassures them that they will get paid even if you cancel.

Credit cards are better than debit cards when you have a dispute on a charge and there are legal limits in the US on what you have to pay if you miss catching a fraudulent charge. With a debit card they can empty your account before you even find out.

Citibank's client center is really bad when you need anything. I've been lied to that they can't help because the back office was already closed, they repeated never got certified letters that they signed reply cards showing they got them, and once I was told they couldn't give me any information on an account that I was the sole signer. Best thing to do is ask the Comptroller of the Currency that regulates them for help.

Depending on your bank account balances, some banks will give you a credit card with no fee. As long as you pay in time, there is no interest.

Some merchants don't like certain credit cards because of their transaction fees.

You should get a credit card to build a credit history. If you ever want to get a loan/mortgage, the lender will look to your credit history in considering your application.

If you have good credit, you either should be able to get (1) a card with no annual fee, and/or (2) a card that gives you something back, perhaps with a fee. The something should be a thing you actually will use, cash being the most useful. However, if there is a particular thing you frequently use, getting rewards toward that thing may be more valuable than getting cash depending on the reward system.

The important thing toward building credit is how long you have had the account (credit card), and how long you have had a history of timely paying off your minimum balance. Even if you only put $20 a month on the card and timely pay it off each month, that will significantly boost your credit history.

Valis, my point regarding the transaction fees was that most retailers hike their prices, even if only slightly to account for this cost. Getting a cash back card just offsets that hike in a small way.

I think the thing you should be looking for is no annual fee. You don't need to pay a bank for the privilege of generating transaction fees for them. The rewards are secondary.

A quick note on usage. I use mine primarily as a charge card, paying it off in full each period, and pay no interest. Not everyone manages this task, but it is worth considering.

You should look up the difference between a Charge card (a la the classic American Express) and a credit card. You can use a credit card like a charge card, but not the reverse.

I take it you have card comparison sites over in the US? They are well worth a look.

The experience in the UK is that credit cards are (somewhat annoyingly for those of us who dislike them on principle) something of a no brainer. Use a decent one with cashback or some other reward scheme and it gives you money for, as far as I can work out, no reason whatsoever.

That's from a paying off in full every month perspective, of course. From the point of view of treating them as a loan, they offer by far the cheapest way of raising money outside of borrowing from family. It is a ridiculously generous system and I haven't the foggiest idea how the banks make money out of it.

@ Octavious: The banks make money out of merchants / shopkeepers, to whom they charge a transaction fee whenever they take payment by credit card. That's why some businesses don't accept credit cards unless you spend over a certain minimum amount - because if they let you use your credit card for a purchase worth just a couple of quid, their margin vanishes.

FWIW, I have never had a credit card in my life, and I was able to get a mortgage to buy a house without any difficulty.

@Jamie

No, I mean the loan aspect. The cash tranfers, balance transfers, and purchase cards that essentially boil down to being a loan of several thousand pounds with zero interest and a miniscule fee. Regular bank loans don't even come close to competing with them. You could take the cash out of a credit card, put it in a savings account, and make money out of thin air.

As long as you repaid it. If you fell behind with the repayments the interest and charges do start to rack up - and they make money that way too.

Many banks also charge an annual renewal fee - that's a source of income for the bank.

Also when you use your credit card abroad the fees you pay are often enormous - way above the actual operational cost to the bank - again a source of income for the bank.

There's a more subtle reason that issuing credit cards is useful for banks.

One of the most basic ways that banks make money is by taking the money that one person has deposited, using that to issue loans to others, and then charging interest on those loans. With me so far?

Ok, so when you have a credit card, that simply transfers money from one account to another, meaning that the money you originally deposited with the bank remains in the bank's control for longer.

=========================
Example 1 - without a credit card:

You deposit £1,000 in the bank.

Later, you decide to buy something worth £1,000. You withdraw the money from the bank and use it to settle the bill. The bank no longer has that £1,000 deposit to use to support loans to others.

=========================
Example 2 - with a credit card:

You deposit £1,000 in the bank. You also have a credit card for convenience and because like Valis you are trying to build your credit rating.

You decide to buy something worth £1,000. This time, you pay for it with your credit card.

In this example, the bank still has your £1,000 deposit and can use it for lending purposes.



Does that make sense?

Well, yes. But that's only if you're an idiot. If you play the game sensibly the banks are giving you free money. Casino games are designed so that the house always wins, and you'd imagine banks would work the same way. But the way credit cards are currently set up anyone with an ounce of self discipline and gumption can make money with a starting stake of zero. Not vast quantities, admittedly, but if my bank wishes to pay for my Christmas who am I to stand in their way?

That was a reply to the charges point.

In reply to your subtle point, that doesn't make any sense at all :p. If the bank is keeping my £1000 deposit by lending me £1000 with no interest via a credit card, the bank still has £1000 less on its books than it had before I bought anything.

In short, yes it has my thousand deposit it can use for lending purposes. But the lending it has done with it is to me at zero interest, whilst it still has to pay me 5% interest on my thousand. The bank is losing

Right then, clever clogs, you tell us. Why are credit card companies profitable?

Looks like my first answer was actually right. 65% of American Express's revenue is fees charged to merchants for processing credit card transactions.

Source: http://www.thesimpledollar.com/how-credit-card-companies-make-money/

I haven't the foggiest idea. All I know is that I use them for most of my shopping and a little bit of stoozing, and they pay me a few hundred pounds for the privilege. Maybe they are funded by legions of idiots. Maybe they are a loss leader for the banks. I genuinely don't know

People still use American Express? Crazy...

Credit cards are an excellent way for credit providers to make wonderful profits for their shareholders. There are a very few clever, careful users of credit cards, the credit card industry calls these blighters " deadbeats". Fortunately most credit card users are what the credit card industry calls "revolvers", people who are constantly revolving an ever increasing amount of debt. Why save money and then get a personal loan when you can pay four times as much interest with a credit card ?

Amex is not really a credit card..its a "charge" card, you have to pay the full balance outstanding each month, unlike a credit card where all you have to pay is the interest and a token amount of the principal debt each month

The standard old fashioned Amex card is totally different from a Visa credit card, Amex was a charge card...you charge stuff to the card, pay the total outstanding amount each month.....the Visa type credit card is very different..that's a flexible loan facility at exorbitant interest rates..of course now there are a multitude of different types of card accounts...charge cards, debit cards, credit cards